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VUN
VUN
VUN - Vunani Limited - Reviewed Condensed Financial Results For The Year
Ended 31 December 2007
Vunani Limited
(formerly Vunani Capital Holdings (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
(JSE code: VUN & ISIN: ZAE000110359)
("Vunani" or "the company" or "the group")
Highlights
- Attributable profit derived from Financial Services up 183% to R88 million
- Fully diluted earnings per share up 184% to 48.0 cents per share
- Headline earnings up 393% to R330 million
- Fully diluted headline earnings per share up to 385% to 32.5 cents per
share (1)
- Net tangible asset value per share up 219% to 66.7 cents per share
REVIEWED CONDENSED FINANCIAL RESULTS FOR THE YEAR ENDED 31 December 2007
Condensed Group Income Statement
Reviewed Audited
December December
2007 2006
12 months 15 months
R`000 R`000
Revenue 131 981 79 203
Other income 59 369 2 145
Operating expenses (105 086) (59 651)
Operating profit 86 264 21 697
Investment income 10 962 4 372
Fair value adjustments 689 958 266 125
Income from equity accounted 31 620 3 604
investments
Profit before finance costs 818 804 295 798
Net finance costs (107 080) (18 928)
Profit before taxation 711 724 276 870
Taxation (154 102) (53 746)
Attributable profit for the 557 622 223 124
period
Attributable to:
Equity shareholders 487 786 168 233
Minority interests 69 836 54 891
Attributable profit for the 557 622 223 124
period
Reconciliation of headline
earnings
Earnings attributable to equity 487 786 168 233
shareholders
Adjusted for:
Revaluation of investment (157 831) (101 293)
properties
Headline earnings attributable to 329 955 66 940
equity shareholders
Fully diluted weighted average 1 015 443 836 995 000 000
shares in issue
Shares in issue at period end 1 177 000 000 995 000 000
Fully diluted earnings per share 48.0 16.9
(cents)
Basic earnings per share (cents) 41.4 16.9
Fully diluted headline earnings 32.5 6.7
per share (cents) (1)
Headline earnings per share 28.0 6.7
(cents) (1)
Note:
(1). The headline earnings calculation included in the prospectus dated
19 November 2007 ("the prospectus") did not exclude the revaluation of
investment properties. Headline earnings has been recalculated in terms
of IAS 33 and the headline earnings circular (08/07) which requires that
the revaluation of investment properties are excluded from the headline
earnings calculation. This has resulted in the restatement of the headline
earnings per share in the prospectus from 46.8 to 34.7 cents per share.
Condensed Group Balance Sheet
Reviewed Audited
December December
2007 2006
R`000 R`000
ASSETS
Non-current assets 2 745 035 928 270
Investment property 700 935 524 600
Property and equipment 4 685 2 019
Goodwill 11 215 6 475
Investment in associates 65 866 32 570
Investments 1 958 040 360 537
Deferred tax 2 729 1 263
Other non-current asset 1 565 806
Current assets 283 744 287 270
Inventory 34 458 113 226
Trade and other receivables 11 773 16 465
Accounts receivable from trading 150 108 129 821
activities
Trading securities - 78
Cash and cash equivalents 87 405 27 680
Total assets 3 028 779 1 215 540
EQUITY
Equity attributable to equity 796 425 214 739
holders of the company
Share capital and premium 198 020 24 706
Reserves 504 143 159 782
Retained income 94 262 30 251
Minority interests 184 036 57 807
Total equity 980 461 272 546
Liabilities
Non-current liabilities 1 780 765 646 786
Financial liabilities 1 593 978 598 726
Deferred tax 186 787 48 060
Current liabilities 267 553 296 208
Financial liabilities 28 786 149 576
Receiver of Revenue 14 984 4 088
Trade and other payables 51 716 16 863
Accounts payable from trading 172 067 125 681
activities
Total equity and liabilities 3 028 779 1 215 540
Number of equity shares in issue 1 177 000 000 995 000 000
Net asset value per share (cents) 67.7 21.6
Net tangible asset value per share 66.7 20.9
(cents)
Condensed Group Statement of Changes in Equity
Share Share Revaluati Retained Minority Total
capital premium on income interests equity
R`000 R`000 reserves R`000 R`000 R`000
R`000
Balance 30 - 24 706 20 321 31 467 3 209 79 703
September
2005
Profit for 168 232 54 891 223 123
the period
Issue of -
shares
Transfer to 165 448 (165 -
revaluation 448)
reserves
Transfer of (25 987) 1 658 (24 329)
portion of
revaluation
reserve
attributable
to
participating
funders
Minority (1 951) (1 951)
share of
equity
Dividends (4 000) (4 000)
Total changes - - 139 461 (1 216) 54 598 192 843
Balance at 31 24 706 159 782 30 251 57 807 272 546
December 2006
Profit for 487 786 69 834 557 620
the period
Issue of 118 173 196 173 314
shares
Transfer to 344 361 (423 56 395 (23 019)
revaluation 775)
reserves
Total changes 118 173 196 344 361 64 011 126 229 707 915
Balance at 31 118 197 902 504 143 94 262 184 036 980 461
December 2007
Condensed Group Cash Flow Statement
Reviewed Audited
December December 2006
2007 15 months
12 months R`000
R`000
Cash inflows/(outflows) from operating 138 860 (76 230)
activities
Cash outflows from investing activities (833 660) (552 076)
Cash inflows from financing activities 754 525 636 252
Increase in cash and cash equivalents 59 725 7 946
Cash and cash equivalents at beginning of 27 680 19 734
period
Cash and cash equivalents at end of 87 405 27 680
period
Segmental Reporting
Reviewed Audited
December December
2007 2006
12 months 15 months
R`000 R`000
By lines of business
Revenue
Financial Services 131 981 79 203
Investment Services 689 958 266 125
821 939 345 328
Attributable profit for the period
Financial Services 88 050 31 097
Investment Services 469 572 192 027
557 622 223 124
Total Assets
Financial Services 292 723 291 358
Investment Services 2 736 056 924 182
3 028 779 1 215 540
OVERVIEW
The directors of Vunani have pleasure in presenting the reviewed results for
the year ended 31 December 2007 ("2007 year end"). The results for the 2007
year end are in line with group forecasts, as set out in its prospectus dated
19 November 2007. Vunani listed on ALTX on 28 November 2007.
Vunani is a majority black owned and managed financial services group with
offices in Johannesburg and Cape Town.
FINANCIAL RESULTS
The financial performance of the group for the 2007 year end is in line with
forecasts as set out in the prospectus and substantially exceeded the results
for the comparative 15 month period ended 31 December 2006. The growth
experienced in the Financial Services business during the 2007 year is in line
with the intended strategic direction of building an operationally focused
Financial Services business. Vunani`s Investment Services business also showed
substantial growth resulting from its ability to successfully execute and
implement a number of Black Economic Empowerment ("BEE") transactions.
The group`s attributable earnings for the 2007 year end increased by 149.9% to
R557.6 million (2006: R223.1 million). Headline earnings grew by 392.9% to
R330.0 million (2006: R66.9 million). Profit before finance costs increased
176.8% to R818.8 million (2006: R295.8 million) mainly as a result of
favourable market conditions and growth in the Financial Services business
which increased 183.2% to R88.1 million (2006: R31.1 million) and the
Investment Services business grew 144.5% to R469.6 million (2006: R192.0
million).
The group increased its investments during the year as disclosed in the
prospectus which led to an increase in its related borrowings.
The equity attributable to ordinary shareholders and cash resources
strengthened as a result of the R175 million proceeds of the private placement
as part of the JSE Limited ("JSE") listing.
BASIS OF PREPARATION OF THE REVIEWED RESULTS
Statement of compliance
The condensed financial statements comprise a consolidated balance sheet at 31
December 2007, a consolidated income statement, consolidated statement of
changes in equity and summarised consolidated cash flow statement for the year
ended 31 December 2007. The condensed financial statements have been prepared
in accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS") and the presentation and disclosure
requirements of IAS 34, Interim Financial Reporting, JSE listings requirements
and South African Companies Act.
The accounting policies applied for the year are consistent with those of the
prior year with the exception of the adoption of IFRS 7 and 8.
The condensed financial statements were approved by the Board of Directors on
21 February 2008.
Basis of measurement
The condensed financial statements have been prepared on the historical cost
basis except for certain financial instruments measured at fair value.
REVIEWED RESULTS
The auditors, Deloitte & Touche, have reviewed these results and their
unmodified review opinion is available for inspection at the company`s
registered office.
PROSPECTS
Vunani will seek acquisitions in the Financial Services sector that can expand
and strengthen its Financial Services business and in this regard shareholders
are referred to the subsequent events paragraph listed below.
Vunani will continue to take advantage of attractive investment deal flow to
grow its balance sheet.
The capital injection as a result of the listing has enabled the company to
refinance funding provided by third parties where such funding has been used to
acquire equity interests. This is expected to provide significant short, as
well as long term benefits to the company.
The group`s operations are well placed to grow organically and emphasis will be
placed on extracting cash flows from these activities.
In line with the forecast as set out in the prospectus for the period ending
31 December 2008, the current economic environment is less favourable than in
the 2007 financial year, which potentially can result in a reduced fair value
adjustment on investments.
SUBSEQUENT EVENTS
The recent down-turn and volatility experienced by securities listed on the JSE
could have an effect on the fair value of the group`s investments.
Shareholders are referred to the announcement dated 22 February 2008 and are
advised that Vunani has, subject to certain conditions precedent, acquired
certain assets previously owned by Exchange Sponsors (Pty) Limited and SME
Corporate Solutions (Pty) Limited from Wessel van der Merwe and 51% of
Retirement Fund Solutions Holdings (Pty) Limited for a maximum aggregate
purchase consideration of R139.71 million. The purchase considerations are
subject to certain profit warranties.
In addition shareholders are referred to the announcement dated
22 February 2008 in which shareholders were advised that Vunani has also
entered into further negotiations, which if successfully concluded may have a
material effect on the price of the company`s securities. Accordingly,
shareholders are advised to exercise caution when dealing in the company`s
securities until a full announcement is made.
SHARE CAPITAL
Vunani has, through a private placement, placed 175 000 000 ordinary shares at
100 cents per share to selected investors of Vunani with the listing on the JSE
on 28 November 2007.
DIVIDEND POLICY
Initially all earnings generated by the group will be utilised to fund future
growth and acquisitions. The company will periodically reconsider its cash
position with the intention to distribute dividends to shareholders as soon as
prevailing circumstances allow. No dividend will be declared in respect of the
year ended 31 December 2007.
STATEMENT ON GOING CONCERN
The condensed financial statements have been prepared on the going-concern
basis since the directors have every reason to believe that the company has
adequate resources in place to continue in operation for the foreseeable
future.
APPRECIATION
The invaluable contribution of our directors, management and staff is clearly
reflected in these results. Their sustained support and performance will
enable Vunani to continue growing and prospering into the future. Our sincere
appreciation is extended to each and every one of our employees for their
efforts and performance.
To all our shareholders, a special thank you for your continued support. Your
loyalty and confidence in our group is appreciated.
On behalf of the Board
E G Dube
W G Frawley
Chief Executive Officer
Chief Financial Officer
25 February 2008
CORPORATE INFORMATION
Non executive directors: A C Nissen (Chairman), B B Finca, A F Pieterse, W C
Ross
Executive directors: E G Dube (CEO); W G Frawley (CFO), B M Khoza, N M
Anderson,
C E Chimombe-Munyoro
Registration number: 1997/020641/06
Postal address: PO Box 652419, Benmore, 2010
Company secretary: William Guy Frawley CA (SA)
Telephone: (011) 263 9500
Facsimile: (011) 784 3095
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Auditors: Deloitte & Touche
Designated Adviser: Vunani Corporate Finance
These results and an overview of Vunani Limited are available at
www.vunanilimited.co.za.
Date: 25/02/2008 08:22:01 Produced by the JSE SENS Department.
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